Regional innovations - San Diego: How to bridge a mega-region’s urban and rural divide

It began five years ago with a simple (and audacious) premise: To drive economic prosperity for the 6 million people living across the sprawling mega-region along California's border with Mexico, the three very different border regions—San Diego, the Imperial Valley, and Baja California—needed to find a way to work better together.

There was more than a little history to overcome, of course. Urban San Diego, with its booming defense and technology sectors, six universities, and highly educated workforce hadn't always been a natural partner for the rural Imperial Valley, a sparsely populated agricultural region struggling with chronic unemployment. Like so many of California's urban and rural areas, the two counties had spent decades competing for resources—water, in particular. South of the border, meanwhile, Mexico operated in another language and a different currency.

But as the Cali-Baja Mega-Region Initiative, as it's now called, celebrates its fifth year in existence next month, it has become clear these three distinct regions can not only overcome their differences—they've found new ways to thrive together. A recent profile by the California Stewardship Network celebrates public and private sector leaders on the border for a range of successful collaborations that are taking advantage of the mega-region's diverse resources: They include dramatic expansions of the solar industry and emerging biofuels sector, along with a promising first attempt to align workforce development practices with the new economy by training Imperial Valley machinists to work in San Diego's advanced manufacturing sector.

The California Economic Summit is working to scale up innovative regional efforts like these, joining together with San Diego's mega-region partners, along with dozens of regional organizations across the state, to pursue a shared agenda that will create jobs and keep California competitive. The Summit's Workforce and Innovation Action Teams, in particular, have already taken lessons learned from the mega-region's successes to push for policy changes that are supporting economic development efforts across the state. (More on that below.)

The source of success

Leaders in the Cali-Baja Mega-Region chalk up the initiative's early success to something very simple: While others saw only obstacles to collaborating across regional lines, they saw something else.

"The mega-region came together because we saw an opportunity to think about this region differently," says Lisa Easterly, vice president of marketing at the San Diego Regional Economic Development Corporation, one of the driving forces behind the initiative.

Five years ago, the clean tech economy was just starting to emerge, and its demands played right to the region's strengths. San Diego was already a high-tech center of entrepreneurship and venture capital, while right next door, the Imperial Valley was home to abundant sun, wind, and land. "All at a very reasonable price-point," says Easterly, "with a reasonably priced workforce and infrastructure to go with it."

Mexico, meanwhile, had a strong manufacturing base for a range of products—from medical devices to aerospace—and it was only a short drive away. (As opposed to, say, China.) In other words, says Easterly: "We realized we were positioned to innovate, design, develop, and manufacture all sorts of products that are needed for the next generation of the new economy."

But how to get there? To drive collaboration between San Diego and Imperial Valley, the two counties started by conducting an analysis of their assets.

"That's where this initiative really began," says Christina Luhn, director of the Cali-Baja Mega-Region Initiative. "Out of those conversations, we came up with a strategic plan—an overall vision with a set of priorities around workforce and infrastructure. The plan responded to the gaps by setting priorities."

Four industries, in particular, were identified as top priorities: Cleantech, applied biotech, logistics, and advanced manufacturing. The San Diego Regional EDC then helped bring together a diverse group of stakeholders from each region—economic development leaders, public officials, academic and private sector business leaders—to identify ways they could collaborate.

Solar manufacturing — Soitec, an international company that manufactures semiconductor materials, announced in December 2011 that it was opening a $150 million concentrator photovoltaic module manufacturing facility in San Diego County. Soitec also received a contract with San Diego Gas & Electric to produce a 150 megawatt solar power plant on a 1,057-acre site in Imperial County. These Soitec operations will benefit both counties and will create hundreds of new jobs for area residents. The counties are also working together on a plan to train residents as solar technicians and other careers to be ready for these new jobs.

Biofuels sector — The algae biofuels sector in the San Diego region is growing and gaining traction internationally. Imperial Valley has the ideal climate and tracts of land for growing algae, while San Diego has researchers and startup companies testing new algae biofuels. The University of California San Diego and other companies are building testing facilities in Imperial County and hope the region will be "ground zero" for the algae biofuel industry.

Workforce development — The two counties have created a longer-term plan to train the region's workforce and align resources to have a more fluid workforce throughout the region. Walmart funded an effort to develop strategies for more effectively aligning workforce strategies, sharing resources, and training workers. The partnership has started a pilot training program to test their plan. Alerted to the challenges all manufacturers face to maintain a skilled workforce by Solar Turbines, the two regions worked with regional workforce groups including the Imperial Valley Regional Occupational Program, a regional training organization, to develop a program that could help provide the skilled workforce for manufacturers in both counties.

What the state can do to help

Luhn, the initiative's director, is proud of the region's initial successes, but she believes there is much more to be done—both in the region and to drive growth in other regions across California.

"I confess when I started this project, I believed what I read in the paper—that there wasn't any manufacturing left in America, that it had all gone overseas. Now we know how wrong that is," says Luhn. "Globalization has changed the nature of manufacturing and technology."

Retooling a regional economy doesn't happen overnight, of course. Which is why the Economic Summit is supporting regions like San Diego as they position themselves in the new economy for the long-term. Three Action Teams, in particular, have applied lessons learned by the mega-region initiative to push for statewide policies that support sustainable economic growth:

Workforce: The Summit's Workforce Action Team has supported the passage of two bills (SB 1070 and SB 1402) that will better align the state's community colleges with their region's economies.

Water: The Water Action Team is also supporting regions like San Diego and the Imperial Valley, pushing for a comprehensive approach to water policy that meets the needs of both agricultural and urban users.

Like many regions across California, the Cali-Baja Initiative has helped regional leaders realize many of the resources they need to be successful were already right at their fingertips—they just needed to be coordinated better.

"We have an advantage in California," says Luhn. "We already have companies, we already have people out there doing a bunch of exciting things—a lot of times they're just two hours away."

On the border, at least, they're finding ways to get a little closer—and the result is a new model for building a prosperous regional economy.